By John Ballard
The subject is so old and tired I don't have enough energy to put up yet another post.
Those who need to be told once again go read this Wonk Room link.
The reason for my post is to copy this great comment from the above link...
Let me get this straight; we pay private oil companies -big money- to make enormous profits, and then when they f+ck up, we bail them out at enormous costs.
First, we pay the rapist to rape and brutalize us. Then, we purchase all the cops, judges, and juries necessary to ensure that our multitudinous defilers can, always and without fail, skip away scott free toting our loot. How stupid is that?
No wonder the Chinese are laughing at us. State Capitalism may be anti-profit, anti-Free Market, and could quite possibly be the antithesis of Capitalism itself, but at least China�s gigantic state run corporations and banks, even though they don�t produce tremendous quarterly reports, do generally work in reasonably efficient fashion for the greater good of the Chinese nation-state and its people.
Now, if you are policy maker, sworn to honorably defend the best interests of your country, which system makes the most sense; subsidizing mass public rape by international corporations to produce only highly consolidated private gains, or, something else, like say, establishing public banks and corporations � run by and for and solely for the benefit of the citizens of your nation.
Couple of points about banks and commerce.
?The Bank of North Dakota is the only sate-owned bank in the country and it's not in trouble.
The Bank of North Dakota is the only state-owned bank in America�what Republicans might call an idiosyncratic bastion of socialism. It also earned a record profit last year even as its private-sector corollaries lost billions. To be sure, it owes some of its unusual success to North Dakota�s well-insulated economy, which is heavy on agricultural staples and light on housing speculation. But that hasn�t stopped out-of-state politicos from beating a path to chilly Bismarck in search of advice. Could opening state-owned banks across America get us out of the financial crisis? It certainly might help, says Ellen Brown, author of the book, Web of Debt, who writes that the Bank of North Dakota, with its $4 billion under management, has avoided the credit freeze by �creating its own credit, leading the nation in establishing state economic sovereignty.� Mother Jones spoke with the Bank of North Dakota�s president, Eric Hardmeyer.Mother Jones feature, March 2009
?General Motors is now selling more cars in China than at home.
Sales in China by GM and its joint ventures totaled 1.21 million vehicles in the six months ended June 30, topping U.S. deliveries of 1.08 million, based on figures reported separately by the automaker.
This would be the first time any overseas market has consistently outsold GM's domestic market in the carmaker's 102-year-old history, said Michael Albano, a Shanghai-based spokesman.
Imagine what unemployment would be had General Motors been allowed to collapse.
Yeah, I know about how someone picking up the body parts and launching a bunch of new ventures to take its place, but I'm thinking of now, not when our grandchildren are finishing school.
So what do we celebrate this Independence Day?
How about making sure all that companies sucking on the tax tit get enough business, starting with British Petroleum.
Defense Department remains a large BP customer
The Department of Defense has kept up its immense purchases of aviation fuel and other petroleum products from BP even as the oil company comes under scrutiny for potential violations of federal and state laws related to Gulf of Mexico well explosion, according to U.S. and company officials.�
BP remains a heavy supplier of military fuel under contracts worth at least $980 million in the current fiscal year, according to the Defense Logistics Agency. In fiscal 2009, BP was the department's largest single supplier of fuel, providing 11.7 percent of the total purchased, and in 2010, its contracts amount to roughly the same percentage, according to DLA spokeswoman Mimi Schirmacher.
"BP is an active participant in multiple ongoing Defense Logistics Agency acquisition programs," Schirmacher said, without providing details. BP spokesman Robert Wine said he was aware of at least one "big contract" signed by the U.S. military after the oil rig explosion on April 20, involving the supply of multiple fuels for its operations in Europe.
So far, members of Congress have discussed barring BP from future oil and gas drilling leases, not from fuel sales to the government. Rep. George Miller (D-Calif.), who co-chairs the House Democratic Steering and Policy Committee, said last week that he would introduce legislation to shut BP out of such leases for the next seven years as punishment for what he described as its "serial" legal violations. But Rep. Bart Stupak (D-Mich.), who chairs the House Energy and Commerce subcommittee on oversight and investigations, said in a statement that "the U.S. government needs to look at all possible options when it comes to showing BP, or any corporate bad actor, that a continued culture of cost cutting and increased risk taking will absolutely not be tolerated."
More at the link for those with the stomach.
"...starting with British Petroleum."
ReplyDeleteExcept that there is no such company. The initials BP have not stood for anything for quite a few years.
No wonder the Chinese are laughing at us. State Capitalism may be anti-profit, anti-Free Market, and could quite possibly be the antithesis of Capitalism itself, but at least China�s gigantic state run corporations and banks, even though they don�t produce tremendous quarterly reports, do generally work in reasonably efficient fashion for the greater good of the Chinese nation-state and its people.
ReplyDeleteThe efficiency and particularly the benevolence of state-run corporations are very much open to debate. I�m not entirely opposed to such, you understand, but they are far from ideal and there are many areas I wouldn�t want to see them poking their noses into. They work best in areas where the potential for natural monopolies exist; since monopolies tend to do the same thing state-run corps have the tendency to do, stifle innovation and possible competition. Such isn�t bad for their business, but it sucks for the consumer and at least the state-run corps tend to minimize the gouging.
Even in cases like your North Dakota bank, the solution to the current bankster crisis isn�t state-run banks so much as a sane and tight regulatory environment. Allowing competition, and ensuring that said competition is fair and open, and that the banks aren�t making dangerous bets with other people�s money, is a better way for government to go rather than taking over the banking industry itself. Same goes for most other industries. (I�d also note that the Bank of North Dakota isn�t the only bank in the U.S. to have weathered the crisis with comparable ease. Most of the smaller banks didn�t have the capital to play with the big boys and their credit default swaps and as a result are still in good standing. Even the Canadian banks that our PM keeps holding up as examples to the rest of the world survived in no small part to the fact that the previous Liberal government disallowed their mergers that the bank CEOs admitted were intended to create banks big enough to play the derivatives game with the big boys across the border. Just a guess here, but I bet that BND�s smallish size helped considerably with its recent success.)
And state-run corporations are hardly immune to bad financial management and scandals. We had a http://www.cbc.ca/canada/north/story/2010/05/06/nunavut-trust-overruns.html�>pretty good example of such up here recently. And they can even be worse due to the fact that the services most state-run corporations provide are of the types that have a pretty big political cost if their provision is ended or the cost is driven up, which can all too easily tempt the politicians in charge to ignore major structural problems until it�s far too late and even more costly to fix. Not that this doesn�t happen in the private sector, but when a private corporation fails, the taxpayer doesn�t necessarily have to bail them out, even if our governments seem to enjoy doing so these days, and even then, they�re not always on the hook for the full tab, as the creditors of GM screamed and whined over. When a publicly run corporation screws up on the other hand, the taxpayer has no way of getting off the hook for every single dime owed.
No argument from me, BJ. I just tossed those in there for variety. You need go no further than Iran or Venezuela to see economic damages resulting from state oil socialism. Completely inverted market economics with no good outcomes. At the same time, however, it's clear that China, India and other countries are fully committed to state-run enterprises and hybrid arrangements with hand-picked entrepreneurs having deep pockets.
ReplyDeleteIf US companies, both manufacturing and financial, are to compete in the global marketplace then size limitations and taxes can work against them. This is part of the reason for Wall Street's resistance to the size limitations in the regulatory package. I'm in favor of the tightest possible controls and penalties -- whatever it takes to protect consumers -- but at the same time I'm agnostic about size limitations.
John, I�m not really looking for size limitations either. As noted, I think a good part of the recent banking crisis could have been adequately dealt with if the U.S. had a better regulatory environment, such as the regulatory agencies actually trying to enforce the regulations, not to mention actually going in and regulating some of the more insane financial instruments these guys thought up. Regardless, I only mentioned size because, in North America at least, it turned out to be a pretty good determining factor in how messed up a bank was. Of course, there is also that whole �too big to fail� thing to take into account.
ReplyDeleteIf US companies, both manufacturing and financial, are to compete in the global marketplace then size limitations and taxes can work against them.
Not to put too fine a point on this, but the really big companies are multi-nationals with little or no loyalty to any nation. Part of what you were getting at in your post, I�m thinking. They use their power and influence to rape the nation-states of their wealth for their own benefit. My point being that regardless where they started or are headquartered, by the time they reach this stage, they aren�t really US companies anymore.
We're on the same wave length. Several years ago it became clear that transnational companies were leaving political considerations in the dust. Or more to the point, simply tracking various political expenses (from lobby fees to taxes to petty bribes to wholesale naked systemic corruption) as just another journal entry on the balance sheets.
ReplyDeleteAn argument can be made that old-fashioned nationalism is now obsolete and nationalistic sentiments are nothing more than focus groups writ large. On the balance sheets military expenses now fall under "marketing." And crumbs tossed in the direction of safety, environmental concerns and the arts are footnotes to decorate annual reports.